Profile of SturmtigerCobra

“If the royalty were just owed to Gearbox on the whole and then Randy diverted it, it would look very much like stealing,” Hoeg told GameDaily via email.
The word “recoupable” is important, because it indicates that the bonus was part of 2K’s funding of Borderlands 3’s development and, like most publisher expenses, must be paid back by way of royalties after the game ships.

In Callender’s original complaint, he alleged the misappropriation of funds. In his most recent amended petition, he and his attorneys have provided both the original contract clause and an amendment to the “Bonus for satisfaction of dedicated executive requirement” clause. The March 1, 2017 amendment authorizes 2K Games to divert Pitchford’s $12 million recoupable bonus to his personal company, Pitchford Entertainment, Media, and Magic. The document, which is redacted, does clearly bear signatures for both Gearbox and 2K representatives.

KazumaID
Publishers loan money to game developers, when the game ships the game developer sees no money until all the money they've loaned is paid back. So under this agreement, 2k is paying Randy 12m and Stephen bahl 3m. those 15m has to be paid back by gearbox as the bonuses were "loans".

Here's the thing, those 15m that gearbox has to pay back would have gone to the employees, as gearbox has a royalty program (which they advertise as a plus to working for gearbox). Randy has mentioned it on stage iirc. Now, if BL3 cost 150m to make, gearbox has to pay out 165m to start seeing profit. Profit that would have gone to employees, 15m to be exact. So 2K isn't out 15m, they're not going to actually pay those bonuses. The employees of gearbox software are.

New documents in the suit filed by Wade Callender, former Gearbox corporate counsel, against Randy Pitchford back up a claim that Pitchford diverted studio money to a personal company.

A new filing in the ongoing legal struggle between former Gearbox corporate counsel Wade Callender and studio president Randy Pitchford provides evidence for one of the suit’s most damning accusations.

In late 2018, Pitchford sued Callender over a series of financial matters that include allegations that Callender misused company credit cards for personal expenses and destroyed evidence related to a home loan funded by the studio. Callender countersued a month later, in December 2018, presenting a salacious account of a USB drive full of pornography and sensitive corporate documents left by Pitchford at a Medieval Times restaurant.

One of many allegations included in the suit indicates that Pitchford syphoned $12 million in Borderlands bonuses intended for the studio. At the time this came to light, in January 2019, Gearbox vehemently denied the entirety of Callender’s accusations.

“The allegations made by a disgruntled former employee are absurd, with no basis in reality or law,” the studio told Kotaku. “We look forward to addressing this meritless lawsuit in court and have no further comment at this time.”

On June 12, 2019, Callender’s attorneys submitted a new 76-page filing that includes an amendment to the Borderlands 3 contract between Gearbox and 2K (originally dated November 29, 2016) that references the $12 million (plus another $3 million for remaining Gearbox co-founder and chief financial officer Stephen Bahl). This contract amendment includes a clause titled “Bonus for satisfaction of dedicated executive requirement.” This clause states that the Developer (Gearbox Software, LLC, as defined by the contract) is eligible for a “recoupable” $15 million bonus.

In other words, upon satisfaction of the terms, publisher 2K Games would pay out $15 million to Gearbox split into three payments of $5 million each. These are funds earned by Pitchford and Bahl in their roles as Gearbox employees. 2K Games very much wanted Pitchford and Bahl involved in the project, and the clause ties the $15 million to three key development milestones (including “release to master” or what is commonly called “going gold”), their “attentions toward the development and success of” Borderlands 3, and their personal engagement for 30 hours per week. The word “recoupable” is important, because it indicates that the bonus was part of 2K’s funding of Borderlands 3’s development and, like most publisher expenses, must be paid back by way of royalties after the game ships.

In Callender’s original complaint, he alleged the misappropriation of funds. In his most recent amended petition, he and his attorneys have provided both the original contract clause and an amendment to the “Bonus for satisfaction of dedicated executive requirement” clause. The March 1, 2017 amendment authorizes 2K Games to divert Pitchford’s $12 million recoupable bonus to his personal company, Pitchford Entertainment, Media, and Magic. The document, which is redacted, does clearly bear signatures for both Gearbox and 2K representatives.

In addition, the latest amendment specifically points to Gearbox’s repeated insistence that “Callender was lying so egregiously” that the studio threatened to take action against Callender by filing a grievance against him with the State Bar of Texas. Gearbox has not followed through on this threat.

While we now have proof that funds were originally intended to be paid to Gearbox have since been diverted to Pitchford’s company, there are factors that we still don’t fully understand. Pitchford is a 50% owner of Gearbox Software LLC and has 51% operational control (with Bahl controlling the rest). According to attorney Richard Hoeg of The Hoeg Law Firm, the ownership situation could confound the matter.

“If the royalty were just owed to Gearbox on the whole and then Randy diverted it, it would look very much like stealing,” Hoeg told GameDaily via email. “As an officer or director you owe a duty to protect the assets of the company. That’s usually divided into a duty of loyalty and a duty of care. Here the duty of loyalty is very much implicated, as one could argue—as they are in fact arguing—that Randy took a business opportunity directly out of the hands of the company he owes this duty towards."

However, because the clause is written to specifically name Pitchford and Bahl, a case could be made that he earned those funds directly.

“It was likely Randy negotiating the agreement directly, so that brings up its own concerns, especially if the plan was always for Randy to receive this $12 million,” Hoeg continued. “In fact, if he weren’t in functional control of the company, I wouldn’t doubt that if such a provision were in an agreement of this type, that he could go to his board and CEO and say, I deserve a portion—or perhaps even all—of such bonus amount. The issue is that he is in control of the company, and I’m not sure they went through the proper corporate processes to ‘cleanse’ any such decision to divert the funds to his magic company. Such a cleansing action would ordinarily take place through the approval of “disinterested” directors and/or stockholders. In other words, if the folks that are not directly benefiting from the contract or payment approve of it, generally, the law is going to be okay with it. It’s the kind of thing a general counsel would recommend.”

With the new documents coming to light, Pitchford’s attorneys filed a motion to enforce a protective order the parties previously agreed upon to protect confidential documents between Gearbox and 2K Games. That motion was denied, as Callender’s counsel pointed out that these documents were not part of discovery and, therefore, could not be included in the protective order.

We reached out to Gearbox to offer the studio a chance to update its categorical denial of Callender’s allegations. The studio declined.

However, publisher 2K did share a statement on the matter.

“We don’t publicly discuss the details of confidential business terms between 2K and our partners,” a company representative told GameDaily via email. “In addition, it is our practice not to comment on our business partners’ legal matters.”

A jury trial is currently set for January 7, 2020. However, a settlement may preclude the need for a public brawl. This is an emotionally charged feud between two childhood friends and former business partners amid an enormous marketing rollout for one of this fall’s most anticipated games.

No matter who wins in front of a judge, Gearbox is losing in the court of public opinion. Each new element of this story that comes to light overshadows the work of the studio’s developers and the long-awaited Borderlands 3.

Hands0ffmybr3ad
Can tell you as someone who worked under him, he is a collossal piece of shit. The corporate side of Gearbox and 2k hired PR teams to follow him around to make sure he didn't say or do anything stupid, and even with that, he managed to get through.

He takes credit for other peoples work, apparantley embezzles company money, and is just a complete and total piece of shit. Glad to see it's finally coming to light.

How was the project born? How do you live the responsibility of being the studio responsible for such an important series for the world of video games?
*SNIP*
Adam Isgreen (google translate):We are the internal studio created by Microsoft specifically for Age of Empires and our task is to start a new era for the franchise. Receiving so much trust from Phil Spencer and all the other heads of the video game division is really fantastic. A good part of the team, among other things, is composed of the original members of Ensemble Studios and in general we are all great lovers of the series and genre:

There's a bit of confusion in here --
Forgotten Empires, the developer working on Age II DE has members of Ensemble working there, not at the new MS Age studio
There's no change to the relationships with FE, Relic, etc. - the Age studio isn't taking over any projects from our development partners
Carry on!

Age of Empires studio (official name hasn't cleared legal yet) | USA | founded in 2019

cartoon_soldier said:
Wololo Studios?

Ishmae1(Adam Isgreen): Nope! But we did consider that one... and over a hundred others. You'd be amazed (or really, not, in this day and age) how hard it is to find a name that some LLC or side business doesn't already use.

Joseph said:
I kinda wish the AoE team had a cool name.

Ishmae1: We do, it just hasn't cleared legal yet. Once that's done and the logo is in place, we'll show it off.

Posted by u/Tattorack
3 days ago
So I received an Email from the Age of Empires team mostly concerning the closed Steam beta for AoEII DE. But they closed with something interesting:

" We also want to address the War Elephant in the room and acknowledge that we've been a little quiet in the past. Moving forward, we will be changing how we communicate with our valued Insiders – in a big way. Keep your eyes on your inbox for lots more exclusive Age of Empires Insider news, perks, and more!
Stay connect with us on Facebook, Instagram, and Twitter as well as check out our brand-new Age of Empires Discord channel here.
Thanks,
The Age of Empires Team"

It could mean nothing or it could mean that we're not gonna have complete silence about Age of Empires projects in the near future. Because let's face it, we've been kept pretty in the dark about any developments.

FortyWaterBottles
Sad to hear you all decided to sell your souls and partner with DS. Hope the Fortnite money is/was worth it. You really should be aware for the future, and make sure that DS is aware, what this whole Shenmue debacle has done to tarnish the already less-than-stellar reputation crowdfunding campaigns have.

Sheep_wielder
Community Manager
Yeah the Shenmue situation is not good, but not all DS games go to EGS.

signorrossialmare
if i would be valve i just wouldn't let you generate keys anymore for devs/publishers who don't sell their game on steam itself.

https://twitter.com/CaseyExplosion/status/1129713218321027073
*SNIP*
They're buying customers.
There's an anxiety about Epic because what they're doing is aggressive. They don't want to be competition, they want to be the last man standing and be the defacto monopoly. That's the end goal, drive Valve out of business and reap the benefits.